cost management strategies for cloud services

Summary Results • January 2015

Cost Management Strategies for Cloud Services


Program Overview

Between December 2014 and January 2015, Gatepoint Research invited selected IT, Finance and Operations executives to participate in a survey themed Cost Management Strategies for Cloud Services.

Candidates were invited via email and 100 executives participated.

Management levels represented were predominantly senior decision makers: 9% held the title CxO, 21% were VPs, 39% were Directors, and 31% were Managers.

Survey participants represented firms from a wide range of industries including business & financial services, manufacturing, healthcare,telecom services, media, and utilities.

Responders worked for large firms: 83% were in the Fortune 1000 and all firms had revenues greater than $500 million.

100% of responders participated voluntarily; none were engaged using telemarketing.


Observations and Conclusions

Survey responders see IT as a tool to deliver more service at lower costs (61%) and a means to enable self-service (60%).

Cloud in all forms is widely used, mostly in a hybrid, public/private, hosted/on-premise format. A mere 6% of survey participants use on-premise-only for their IT environment and 97% have adopted or plan to adopt cloud at some level for their IT.

Although cloud is widely used among responders, there is still lots of room for growth: 69% report that less than a quarter of their IT workload is on cloud today.

Currently, tracking cloud use is inconsistent: billing reports (42%) and network monitoring reports (35%) are the primary methods of tracking consumption of all cloud resources

The desire to improve cloud consumption/usage tracking is strong:

- 70% say it’s desirable or highly desirable- 71% would use their ability to track all cloud consumption to improve their

IT forecasting.- Top priority for tracking cloud consumption is at the business unit level

(73%).

Summary Results • January 2015Copyright © 2015 Gatepoint Research. All rights reserved. The information contained in this report is the sole property of Gatepoint Research and may not be

used, reproduced, redistributed in any form including, but not limited to, print and digital form without the express written consent of Gatepoint Research.

What IT strategies are you currently pursuing?

Survey responders see IT as a tool to deliver more service at

lower costs (61%) and a means to enable self-service (60%).

61%

60%

50%

50%

39%

24%

3%

0% 10% 20% 30% 40% 50% 60% 70%

Deliver more service at lower cost

Move to service delivery model – Enable self-service

Reduce data center footprint

Improve alignment of IT spend to business goals

Move workloads off premise

Shift from CAPEX to OPEX where possible

Other



What IT environments are in use at your company today?

Cloud in all forms is widely used, mostly in hybrid, public/private, hosted/on-premise

format. A mere 6% use on premise only for their IT environment.

49%

10%

52%

5%

45%

2%

54%

6%

2%

0% 10% 20% 30% 40% 50% 60%

Private cloud hosted plus others

Private cloud hosted only

Private cloud on-premise plus others

Private cloud on-premise only

Public cloud plus others

Public cloud only

On premise plus cloud

On premise only

Other



How would you characterize your cloud adoption position?

97% have adopted or are adopting cloud for their IT.

15%

44%

27%

10%

3%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Advanced Intermediate Novice Evaluating No adoption intent



How much of your IT services workload is private

or public cloud today (vs. on-premise)?

Although cloud is widely used among responders, there is still lots of room for growth:

69% report that less than a quarter of their IT workload is on cloud today.

69%

18%

6%

7%

0% 10% 20% 30% 40% 50% 60% 70% 80%

0 to 25%

26 to 50%

51 to 75%

76% or more



How do you currently track usage/consumption of all cloud resources?

Billing reports (42%) and network monitoring reports (35%) are the primary

methods of tracking consumption of all cloud resources.

42%

35%

34%

21%

14%

8%

4%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Cloud service provider billing reports

Rely on network monitoring reports

Pull data as needed fromdisparate services/systems

Manually compile monthlyor annual estimates of usage

No way to track

Don't use cloud

Other



How desirable would it be to track all cloud

consumption/usage across the enterprise?

70% say the ability to track all cloud consumption and

usage is desirable or highly desirable.

Extremely desirable

39%

Very desirable24%

Desirable17%

Minimally desirable

10%

Not desirable5% N/A

5%



If you could track all cloud consumption/usage across the

enterprise, how would you use that information?

71% would use their ability to track all cloud consumption

to improve their IT forecasting.

71%

55%

52%

52%

51%

48%

29%

4%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Improve IT forecasting

Better match allocation vs. utilization

Implement charge-back/show-back

Better plan future cloud projects

Expand on-demand/self-service access to cloud

Educate business leaders on cost/benefit issues

Convince senior management to acceleratecloud migration

None of the above



At what levels would you like to be able to track cloud consumption/usage?

Top priority for tracking cloud consumption is at the business unit level (73%).

73%

57%

56%

33%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Business unit

Department

Project

End user



Profile of Responders:

Industry Sectors

Survey responders represent a wide range of industries.

Financial Services

41%

Manufacturing18%

Telecom Services

11%

Business Services

10%

Media9%

Healthcare7%

Utilities4%




Revenue

Responders work for large companies – 85% are in the Fortune 1000.

$500 million - 1.5 billion, 15%

$1.5 - 5 billion, 21%

$5 - 10 billion, 18%

$10 - 20 billion18%

$20 - 50 billion, 19%

$50 - 100 billion, 7%




Job Level

Survey participants are senior IT, finance, and

operations executives in decision making positions.

Manager, 31%

Director, 39%

VP, 21%

CxO, 9%


Even though enterprises are moving to the cloud in order to reduce their IT costs, most lack the capabilities to manage their spending in this new cloud economy. Existing financial systems are designed to track fixed capital expenditures, not usage-based, multi-platform operating expenses.

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